CREATIVE AVENUE FOR JUDGMENT CREDITOR TO COLLECT A JUDGMENT

images-1I have a judgment against another entity.  Now what?  I want to briefly talk about this “now what?” in the context of the recent decision in MYD Marine Distributor, Inc. v. International Paint, Ltd., 41 Fla. L. Weekly D2364a (Fla. 4th DCA 2016).  Although this case is not a construction case, it poses an interesting issue for any entity that has a judgment entered against it (known as the judgment debtor) while it is contemporaneously the plaintiff and pursuing monetary damages in an unrelated case or cases.   This case also presents an avenue for any judgment creditor to pursue in the event other post-judgment collection efforts are unsuccessful. 

 

In this case, a judgment creditor received a judgment for $550,000 against the judgment debtor.  The judgment creditor proceeded with post-judgment collection activities and recovered only $120,000 from these activities.  The judgment debtor at this time was the plaintiff in an unrelated lawsuit.  The judgment creditor instituted proceedings supplementary pursuant to Florida Statute s. 56.29 to have the judgment debtor’s pending lawsuit assigned to it.  This would allow the judgment creditor to control the pending lawsuit, settle the lawsuit, and, importantly, utilize any proceeds from the lawsuit to reduce the judgment.   The trial court allowed this assignment and the appellate court affirmed:

 

Donovan [judgment creditor] used section 56.29 to initiate proceedings supplementary. Section 56.29(5) provides that a court “may order any property of the judgment debtor, not exempt from execution, in the hands of any person, or any property, debt, or other obligation due to the judgment debtor, to be applied toward the satisfaction of the judgment debt.” A “chose in action” is “property” within the meaning of section 56.29(5). A “chose in action” is a “personal right not reduced into possession, but recoverable by a suit at law. . . . A right to receive or recover a debt, demand, or damages on a cause of action ex contractu or for a tort or omission of a duty.” MYD’s [judgment debtor’s] lawsuit against Lauderdale Marine [unrelated party] was a chose in action subject to the reach of section 56.29(5) proceedings supplementary.

MYD Marine Distributor, supra (internal citations omitted).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

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